A good way to conceptualize the cost of borrowing money is to annualize interest rates, which offers an easy way to compare loans of varying maturities.
Interest rate swaps are derivative instruments commonly used by sophisticated investors to allow cash flows on interest-earning securities or loans to be exchanged. CNBC explains.
For those who are fuzzy on the topic, Khan of the Khan Academy explains what Libor is and how it is used.
When you buy a U.S. Treasury Security, you’re essentially giving a loan to the government. Salman Khan of the Khan Academy demonstrates how price and yield of treasury securities works.
Yield curves help investors understand the relationship between bonds of differing time horizons to maturity. CNBC explains.